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Ukraine's Euro 2012 preparations: foul play?

Ukrainians are excitedly awaiting the Euro 2012 football tournament, to be co-hosted with Poland. But some suspect those close to the authorities are benefiting disproportionately from the event. Gulliver Cragg reports from Kiev.

The European Union has just suspended plans to pay Ukraine 115 million euros in aid, citing a lack of progress in curbing corruption. Brussels says Kiev has not made satisfactory reforms to its state procurement system: non-competitive, non-transparent tenders mean prices can be inflated and money channelled back into the hands of government cronies.

That, Ukrainians joke, is how ten new benches in the Kharkiv metro came to cost 5,000 euros each. They are not designer benches, but they are part of Ukraine's preparations for Euro 2012. The football tournament Ukraine is co-hosting with Poland is a particularly glaring example of opaque state procurement.

As match tickets go on sale on March 1st, the country is pouring more and more money into getting its much-delayed infrastructure projects finished on time. The urgency has only increased the opacity, says Serhiy Leshchenko of the news website Ukrainska Pravda. Describing the tournament as "a Bermuda triangle into which state funds disappear", he says the authorities are simply "handing out all the contracts to their friends and families' companies".

According to Leshchenko, one firm called Altcom is making as much as 640 million euros from various road and airport projects, as well as the stadium in Lviv. These roads are among the most expensive in the world. It's not clear who ultimately owns Altcom.

Kiev's Olympic stadium re-development could also turn out to be the most expensive ever, with a price tag of 300 million euros widely expected to rise. Much of that work is being undertaken by AK engineering, a firm Leshchenko identifies as being connected with Ukraine's Deputy Prime Minister, Borys Kolesnykov. Kolesnykov firmly rejects the allegations, but Leshchenko says the documents he submitted are unconvincing.

The government and its defenders point to their successes in getting the projects back on track. Ukraine's sluggish preparation had cast doubt on its host status, but not anymore. "In the year since Viktor Yanukovich came to power," says Petro Dymynskiy, president of premier league side Karpaty Lviv, "more has been done than in three years under the previous administration".

And even at non-league village side Dyida, costs are of little concern compared to all the excitement. For rural Ukrainians, 30 euros for the cheapest match tickets is a lot of money. Yet striker Csabo Toth said he was determined to attend: "This is a once in a lifetime opportunity".

Transparency International ranks Ukraine 134th in its global corruption index. The country has deemed Euro 2012 too big to fail, whatever the cost. The opportunities for profiteering are manifest.